A fair amount of nonsense was talked yesterday about the Northern Rock deal, most of it from the two parties involved. George Osborne was touting the sale of the first casualty of the credit crunch as "value for money". The description makes one wonder just how the chancellor approaches his own Christmas shopping. The Newcastle bank had £1.4bn of taxpayer money pumped into it, and its main part is now being sold for £747m, which with time and luck might rise to £1bn. However one holds this deal up, it still represents a loss to the state. Even if everything goes to plan (a big if, given the state of the financial world), taxpayers have just handed over £13 each to the billionaire Virgin boss Richard Branson. They, rather than the chancellor, can judge whether that is a bargain.

The second dollop of nonsense came from Virgin Money chairman David Clementi, who said the change of ownership would create "a significant banking competitor in the UK". Not with 70 branches it won't. Northern Rock was always a small regional player – part of what led to its downfall was Adam Applegarth's desire to vault into the banking premier league. Since nationalisation, the Rock has shrunk its business and halved its staff. It is hard now to see the institution troubling the Big Four high-street names. Indeed, so concerned was John Vickers about getting more serious competition into the banking industry that he proposed putting the Rock together with the 2,500 branches to be disposed of by the engorged Lloyds-HBOS. That would have been an imaginative way of breaking up Britain's retail-banking oligarchy; this is not.

What yesterday's deal emphatically is, however, is a very curious one. Why was the news sprung now? The chancellor did not explain. How far did the government and its bank-holding agency UK Financial Investments explore alternatives such as turning the Rock back into a mutually owned building society? Again, the voter is left none the wiser. That is so even though the voter is also the taxpayer, who also has yet another alias as the selling stockholder in this venture – and thus a powerful reason for wanting to know what is going on with their investment. The distinct impression left is of a chancellor a bit short of good news and cash pushing through a deal that provides a little giveaway fund for this month's autumn statement. This may be wrong, of course, but the sudden haste with which Mr Osborne has acted, and the murk that surrounds this decision, is puzzling. It is all rather reminiscent of another recent chancellor big on tactics and short on strategy, a certain Gordon Brown.

This matters because the coalition had a chance here to try to reshape the banking sector – to make it more diverse, perhaps, or simply more competitive. What it has opted for instead is business as usual. True, ministers will rightly argue that they had little option – that the previous Labour government mandated UK Financial Investments simply to return the maximum amount to the taxpayer. But it does not augur well for how the government treats its much weightier stakes in Lloyds and RBS.

For Mr Branson this really is a sweet deal: he finally gets the prize he has been coveting for years. Arguably, the dessert is all the sweeter for the waiting. When Virgin first sniffed around Northern Rock three years ago, it was a chain of high-street branches with a massive bad debt around its neck. In the intervening period, public officials have taken away the bad debt and tidied up the company. Mr Branson gets a prettified bank, which he can now rename Virgin. He can also play the part of bearded white knight, which is always the tycoon's favourite role. Banking customers and the staff of Northern Rock can only hope that Mr Branson's latest venture does not go down the same inglorious route as Virgin Cola, Virgin Cars and Virgin Brides.